Trying to contain the moves in biotechnology stocks is like trying to contain an outbreak of the E-bola virus, and just as deadly for anyone who has been short these stocks. It seems like everyday some new gene is found, FDA approval is given, or baldness is cured in some rat.
Today the Biotech HOLDRs (AMEX:BBH) blew past the previous high and 38.2% retracement level (anchored to the 9/00 high and the 4/01 low). While its hard to believe these stocks can continue to run at this pace, 152, the 50% retracement and 200-dma area, looks like the next upside target. Looking at some of the biotech components shows that if you're not up over $3 bucks today, you're nothing. If BBH takes a well-deserved break tomorrow, prices should hold above 139.
Russell 2000 Daily Chart
Lost in the shuffle are the impressive gains being put up by the Russell 2000 Index (RUT.X). Russell is now 5 points away from setting a new high for the year. Unlike the Biotech HOLDRs, RUT has already moved above the 200-dma, and could be the first to start taking out some highs from 2000.